Australian Wool Market Continues Downward Trend
March 29, 2019
The Australian wool market continued tracking downward in Week 39. In a continuing pattern, there was again the occurrence of “two markets.”
One market for the good-style, higher-yielding wools and one for the lesser-style, lower-yielding types. Due to the diminishing supply of the better wools, good style lots again attracted excellent buyer support and sold at levels similar to those achieved at the previous sale. Inferior, lower-yielding wools were discounted as buyers struggled to average them into their purchases.
The result of these discounts was overall reductions in the individual Micron Price Guides, which in turn pushed the AWEX Eastern Market Indicator lower for the fifth consecutive series. The EMI lost 16 cents, closing the week at 1,947 Australian cents.
Due to seasonal conditions, the amount of fleece wool yielding less than 60 percent dry continues to rise. AWEX compiled an analysis on yield going back to the 2002 season, and the results highlighted some noteworthy facts. In previous drought years, the highest number of low yielding wools were found in mid-April, meaning these wools typically reach the market in Weeks 44 and 45. This being the case, history shows that the amount of low yielding wools will continue to rise in the next four weeks. This will continue to put pressure on an already over-supplied section of the market.
The crossbreds continued to defy the trend of the other sectors, again recording increases. Strong buyer activity helped push prices up by 15 to 20 Australian cents. The oddments had another week of sharp falls. The three indicators fell by an average of 36 Australian cents.